How are digital technologies changing accountancy and finance?

The role of digital technologies, automation and data analytics is becoming increasingly important for finance professionals. These technologies present the opportunity to assist and develop roles and functions in the accountancy and finance industry.

Gareth John, First Intuition Director, brings together expert speakers to examine new digital technologies, how they are changing roles and skills in accountancy and finance, why they are important for the growth of the industry, and what employers can do to keep up with these changing technologies. This article summarises some of the questions answered by these expert speakers.

Digital Technologies in Accountancy and Finance

How are digital technologies changing accountancy and finance?

The role of digital technologies, automation and data analytics is becoming increasingly important for finance professionals. These technologies present the opportunity to assist and develop roles and functions in the accountancy and finance industry.

Gareth John, First Intuition Director, brings together expert speakers to examine new digital technologies, how they are changing roles and skills in accountancy and finance, why they are important for the growth of the industry, and what employers can do to keep up with these changing technologies. This article summarises some of the questions answered by these expert speakers.

The role of digital technologies, automation and data analytics is becoming increasingly critical for finance professionals. Finance roles and functions now encompass a magnitude of new digital products, digital businesses, finance-related software, and novel forms of digital-based customer communication and interaction. Amongst other benefits, they have the potential to:

  • Improve efficiency
  • Reduce time spent
  • Give a competitive advantage
  • Create additional revenue streams
  • Improve recruitment and retention

Businesses that do not adopt some of these digital technologies risk getting left behind. This article shares answers to questions asked to expert speakers who work with digital technologies in accountancy and finance during a First Intuition Think Tank (FITT) Forum.

Gareth asked some poll questions to gauge where the audience were on their digital transformation journey. The majority had made some progress but for many, it was limited to starting to use spreadsheets in more advanced ways. A reasonable number had adopted automation technologies such as cloud-based software platforms. However, only a few had started to make use of data analytics in a piecemeal way. Only a tiny proportion felt like they had embedded these technologies in either a tactical or strategic way.

Gareth wasn’t surprised by this: “With clients I have been talking to over the last year, they sometimes have pockets of expertise based on self-taught enthusiasts. Though I rarely see any consistency across different teams of how they are adopting these technologies and how they are upskilling staff to work with them. Most organisations recognise the pressing need for these skills, but don’t know how or where to start.”

How to get started

At First Intuition our view is ‘journey before tools’. You need to understand what you are trying to achieve before you can decide which technology is going to work best for you. Often this will start with laying foundations of terminology and mindset which can then be built on.

Guest speakers

Expert industry observers and employers:

  • Mark Proctor –Director of Twenty Seven Solutions and formerly of News UK and AB Mauri
  • Ryan Ebbage – Digital Specialist at Larking Gowen
  • Andy Baker – Head of Internal Audit at Bank of Ireland
  • Rob Mastrodomenico – Founder of Alchemax Analytics
  • Louisa Matheson – Digital Programme Manager at First Intuition

Accountancy awarding bodies:

  • David Lyford-Tilley – Technical Manager at ICAEW
  • Clive Webb – Head of Business Management at ACCA
  • Christian Gagiano – Senior Manager of Curriculum Development at CIMA

You can watch the recording of the forum by clicking the button below.

This was one of the most fascinating employer forums we have ever run, and it is well worth watching the 75-minute recording if you have time. But here are some of the key points that our speakers raised in response to Gareth’s questions:

How have you seen the accountancy sector changing as a result of emerging digital technologies?

“Firms are hearing growing expectations from their clients about using digital technologies.”

“There has been a shift from descriptive analytics to predictive analytics, so looking forward at what might happen.”

“There really is an opportunity for smaller firms.”

“The pandemic has acted as a motivator and a shock wave. There hasn’t been a lot of difference between the reaction of large and small organisations.”

“There is growing need to be able to make sense of unstructured data.”

The accountancy sector has changed as digital technologies alter the role of accountants. With the assistance of digital technologies, accountants can save time on laborious tasks and instead invest their time in more value-added duties such as analysis, storytelling, and forecasting. This has opened up opportunities for new roles, skills, and competitive scope for businesses that adopt the right technologies. However, it has equally created a space for businesses to lose their competitive edge, staff, and clients if they do not keep up with these ever-changing technologies.

Is automation eliminating accountancy jobs?

“It’s not getting rid of accountants but it’s changing their role from simple process-driven tasks to the more interesting end of what accountants can be doing.”

“Automation is reducing the boring jobs and means accountants are able to offer more value to clients”

“Why would you spend £70k per annum employing someone to do work you could train a monkey to do. Automation is freeing up accountants to do the job they were meant to do!”

“Automation is driving cost efficiencies, and freeing up accountants to spend more time on value creation.”

There are more students being recruited into accounting than ever before so automation is not replacing jobs. Automation is enabling accountancy jobs to be more impactful as it can help efficiency and cut time-consuming tasks such as data input. This gives accountants and finance professionals more time to do roles that help their clients such as analysis and projections. Furthermore, automation can help eliminate the opportunity for human error for more accurate analysis.

The potential benefits of automation adoption are widespread across the profession. This is because automation can be implemented into a number of accountancy and finance roles. The adoption of automation also creates new job opportunities. For example, IT experts are needed to maintain and offer support for automation systems.

How has automation and cloud-based technology affected competition?

“Competition has increased, but so has our offering to new clients.”

“Location is not a restriction, you can use technology to give great, quicker client service.”

“To stay competitive, this is necessary.”

Competition has grown as businesses incorporate new technologies and products into their services. These present new opportunities as companies can expand the services they offer and differentiate themselves by specialising in a particular technology area that was not possible before. Furthermore, cloud-based technology for example has meant that physical location is no longer important and has reduced data storage. This opens up the pool of potential clients for businesses as they are no longer limited by geographical proximity.

Is any organisation too small to benefit from digital transformation?

“Definitely not. In fact, smaller organisations are in a very good position to accelerate quickly”

“For a small team technology allowed us to cover an awful lot of ground. Team size was not an impediment, in fact it allowed us to be very nimble.”

“Shaving time off every week, every month, every year-end is massive for us and for our clients.”

“Doing nothing isn’t an option”

No firm is too small to adopt digital technologies of benefit from digital transformations. Technology can be used as ammunition for a competitive edge whilst staying clear of it can hinder success. Small companies are in fact in the best position to adopt their digital transformation journey as they can start right away. A small team also has the ability to be more agile and reactive to the technologies that are relevant and useful to them. They can more easily move to focus on the technologies where the data is telling them to be.

What impact does remote digital working have on client relationships?

“Relationships with clients have never been better.”

“Speaking to clients daily means we are able to have more exciting conversations and improves the value-for-money they get.”

Although some face-to-face communication is essential for maintaining client relationships, remote digital working has in some cases aided accountants’ relationships with clients. Digital remote working has enabled pathways for daily communication that was not possible from infrequent in-person visits. This has also meant accountants can receive a steady flow of information that is up to date. This minimises the likelihood of needing to chase missing data, making roles less stressful and time-sensitive. Furthermore, daily communication between businesses and their clients through instant messaging mediums looks set to continue. Especially as the next generation of professionals have grown up communicating in this way.

How long can accountants keep holding onto Excel? Surely there are better tools available now?

“It’s not about getting rid of Excel, It’s about understanding how to use it in the right way.”

“For a lot of people day-to-day spreadsheets can still play a major role for quick data analysis but you can automate lots of really complicated tasks really easily in code.”

“It’s less about software tools and more about the thought process. It’s about setting up the environment first so that you can implement those technologies.”

There are better tools available for accountants than excel. However, what is the best tool to replace it with and can staff can be trained to use this new tool? Excel is not the best tool for specific accountancy-related tasks, however, no single programme can do so many tasks so well. If businesses want to focus on perfecting a specific task they are able to get better tools for that. Understanding what you want to achieve and focus on is essential for choosing the right digital tools for your business. It is less about the specific software and more about the approach and thought process behind it.

How have digital technologies affected the skills set that a finance professional needs to develop?

“It’s continuous! Accountants need to keep on an educational journey.”

“Changes are very rapid, iterative and responsive.”

“It broadens out the skills set you are looking to develop within your team.”

“The challenge is taking data and turning it into insight that helps you run your business.”

“A lot of digital skills are soft skills. A data analysis project can fail because the messages aren’t being communicated effectively.”

Digital technologies have broadened the skills a finance professional can develop. Skills in digital technologies such as computer programming, data analytics, and automation can assist accountants in working more effectively, efficiently, and powerfully. However, a high level of expertise in these skills, although helpful, are not essential as companies can outsource these services. Skills that appear to be more valuable are an understanding and openness towards digital technologies. Including how they can assist a business in improving/ solving specific problems. Accountants need to know how to ask the right questions to solve the right problems.

Do we need a high level of technical data skills, for instance, should accountants learn Python?

“No. Finance professionals don’t want to embrace it in the way that data scientists would. Accountants want to know ‘what can I do?’ rather than ‘how can I do it?’”

“With low-code/no-code developments someone has already done the coding in the background so accountants don’t need to be able to code to make use of the tools.”

“It’s about opening their eyes to what can be achieved.”

Coding programmes like Python allow us to automate complicated tasks and can assist in cutting workload, improving efficiency, and offers opportunities for new services. Accountants can benefit from learning these coding languages, however, understanding them can be just as valuable. Once code for a function has been written it can be used over and over again. In many cases, accountants can use code that is already written, rather than having to learn how to write it themselves, to benefit from programmes like Python without a high level of technical data skills needed.

For businesses to benefit from digital technologies such as Python, employees need to understand the problem, how digital technologies can help them, and how it links back to assist for specific tasks. Companies may need outsider advice to understand the level of skills that are required and facilitate the right changes.

Do you think digital adoption plays a role in staff retention and recruitment?

“It definitely makes accounting a more appealing career path!”

“Structured skills development in areas like digital technologies and data analytics can give a clear post-qualification development pathway for staff once they qualify as accountants.”

“One of my colleagues went back to Malta two months and continued working as normal.”

“I have a colleague who lives in Spain. She has a swim in the sea every morning before she logs on to work.”

As more young adults with an understanding and experience in digital technologies enter the workforce, employers are likely to find they will be expected to have some degree of digital adoption. Businesses may also begin to find a generational divide. Those who have limited digital adoption may find it more difficult to attract younger staff. Whilst those that have embraced digital adoption may struggle to employ older more experienced accountants that are unfamiliar with using these technologies.

However, as digital technologies become more prominent in the industry, the skills sets that are encouraged by employers to bring in or develop within teams are broadening. This is giving a wider scope of people the opportunity for a career in accountancy and finance. This is because employers look for skills in technology-based programmes and toolings as well as accountancy.

What tends to be the big blockers to organisations adopting digital technologies?

“This is an area where the traditional model of experience and knowledge is turned on its head. Often it’s the more senior staff who have the least experience and confidence with these new technologies.”

“For a number of people there is fear, some are embracing it, some are cautious. Everyone is at different stages.”

“If everyone buys into it from the top down you will get much more impact.”

A major blocker for organisations adopting digital technologies is knowing where to start. Companies are at very different stages in their adoption journeys and many fear about what to do first. There are so many different technologies that help to achieve different things that it can be difficult for businesses to know what and where to focus their efforts. Furthermore, resistance from finance professionals who have not had to use digital technologies in their careers before and do not understand them can block adoption further. But to stay competitive the adoption of digital technologies to some degree is going to be necessary.

For a business to solve its problems it needs to know what it is trying to solve. As well as why it is trying to solve it, what skills are needed to do so, and how to ask the right questions. This is where firms may need to outsource expertise. This will ensure they have the correct information to facilitate the adoption of the most appropriate digital technologies.

How are the accountancy awarding bodies helping their members with digital adoption, and how are the qualifications changing?

The accountancy awarding bodies are keeping their qualifications up to date with information about merging technologies. As well as incorporating digital programmes into the syllabus. ICAEW for example has partnered with data analytics software provider Inflo so that their exams better reflect working in accountancy once qualified. Furthermore, digital skills, cyber skills, practical techniques, data analytics modules, statistical reasoning, bias and error, and the link data between data and wrong conclusions are being embedded into syllabi and the next iteration of qualifications.

Additionally, awarding bodies are supporting their members through continuous action action-focused CPD programmes to understand Python and other relevant digital programmes, as well as how to keep data secure. CIMA has developed an A-F of resources for starting a digital journey.

Useful resources

ICAEW Data Analytics Certificate Programme

Data analytics and big data

How to review a spreadsheet

The digital accountant: digital skills in a transformed world

Transformational Journeys: Finance and the agile organisation

Finance functions: seizing the opportunity

Analytics in finance and accountancy

CIMA resources

Digital mindset